Almost every plan to lower food prices ends up putting the government in one of two businesses, either running a grocery store, as New York Mayor Zohran Mamdani is now doing, or telling grocery stores what to charge. A new proposal from the Kitchen Table Project does neither, which is why I’ve spent more time with it than I expected to. Instead of working on what shoppers pay, it works on what the store pays.
The federal government already buys an enormous amount of food. USDA runs competitive auctions to supply school lunch and other nutrition programs, and it has been doing so for decades. The proposal would let any grocer, whether a bodega in the Bronx or a Kroger in Lansing, buy a basket of 20 staples at a similar auction price. The one condition is that the store has to sell them at a markup that’s set in advance and posted where customers can see it.
This is like a Costco membership where Washington is the buying club and the grocer is the member. The government never owns a store, never runs a warehouse, and never writes a check to cover the gap between what food costs and what a politician would like it to cost. The report estimates a family of four would save about $315 a year.
I’m more sympathetic to this than I usually am to grocery proposals, and the reason is purchasing power. Small stores pay more for the same case of eggs because they buy fewer cases. Price surveys consistently show the big discounters undercutting most supermarkets, and the Atlanta Fed has found that food inflation ran hottest in lower-income metro areas, where shoppers have fewer stores to choose from. If a corner store could buy at something close to Walmart’s price, that’s a form of relief neither a price cap nor Mamdani’s city-run supermarkets can offer. New York is paying for a 30 percent discount at five stores, while this proposal would reach every store that signs up. And since the markup is public, shoppers would have a number to hold their regular supermarket against. This also gives other supermarkets a reason to watch their prices.
But for six of the 20 items, which include eggs, milk and ground beef, the report shows no savings at all. I don’t think that’s a flaw in the design so much as a reminder of where food prices come from. Ground beef is close to $7 a pound because the U.S. cattle herd is the smallest it has been in 75 years. No auction or purchasing plan, however large, produces more cows. I’d also bet against the federal government out-negotiating Walmart and Costco, which have spent decades on procurement and are very good at it. If Washington simply matched what the big chains pay, that would still be a meaningful help to independents, and it’s worth doing. It’s just a smaller promise than the headline number suggests.
Which brings everything back to the markup. The report doesn’t say who sets it. Rent and wages in the Bronx are not rent and wages in Lansing, and a single national margin could end up either squeezing out the stores the program is meant to help or leaving so little room that the discount barely shows up on the shelf. The chains that already get good terms may look at the paperwork and decide it isn’t worth it.
There’s a second-order problem too. A grocer selling 20 items at a capped margin still has to make payroll, and the obvious way to do that is to increase prices on the other several thousand items in the store. A family could save on the program staples, lose it on everything else, and never know the difference.
Even so, this is the first grocery proposal I’ve seen in a while that tries to lower prices through competition rather than by having taxpayers absorb the difference. That alone makes it worth piloting. Name the markup. Say who can join. And then judge it by what a family actually saves on the whole cart, not on a handful of staples.
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